The Treasury Inspector General for Tax Administration (TIGTA) recently released a report finding that accuracy-related penalties are not often proposed in audits of large businesses, and the penalties are generally not sustained on appeal. Between FY 2015 and FY 2017, TIGTA found that of the $773 million in proposed penalties that went to the Office of Appeals, there was a reduction of those penalties totaling $765 million. Of some 4,600 business return exams studied, which resulted in additional tax assessments of $14 billion, only 6 percent had accuracy-related penalties assessed.
The accuracy-related penalty is general 20 percent of the underpayment, but can be up to 40 percent. To read TIGTA’s report on this penalty, click here.
To discuss your options during a business audit, including potential penalty abatement, contact one of our attorneys today.